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Small Business Digest


Survey Says: Promotion Expenditures Growing, But Cash Important To Small Firm Managers

While small companies are shoring up their cash position, they are opening up their wallets for more advertising and public relations, according to a poll of more than 3,000 small business managers.

The survey, completed in early February reveals that by a significant margin respondents were reducing debt load and adding cash but also spending more on promotion.

As can be seen from the attached two graphs, debt load far outdistanced any other factor in terms of reducing expenditures.  By the same token, adding cash was the most important factor on the positive side.

The next three priorities in terms of additional resources involved advertising, public relations and other in-house marketing tools.

When asked if 2007 would be better than 2006, respondents two-to-one said it would be better but felt they needed to do more in order to make sure profits were up.

At the same time, only 55% of the 3,100+ respondents thought their economic sector would be more profitable this year.

A bare majority, 52% said they expected more income from their websites but also said they would be adding to in-house marketing programs and PCs.

Respondents, 81% of whom were either presidents and/or owners said they would be reducing postal stamp machines and employee healthcare expenditures.

As usual, many respondents indicated they would be reducing advertising, a common occurrence when companies pull in their horns in a downturn.  What is significant is that compared to last years survey, the negatives in this area were lower.

On balance, most real property expenditures will remain about the same, reversing a trend from last year where a significant majority of respondents said they would be adding to property, plant and equipment.

Financial software and other institutional computing expenditures should remain flat.

Information Strategies, Inc., parent of this newsletter, has been conducting these surveys for more than seven years and they have proven to be remarkably prescient in how small business owners will react for the rest of the year.

© 2016, Information Strategies, Inc.
P.O. Box 315, Ridgefield, NJ 07657